In interbank clearing networks, a bank experiencing sudden liquidity or solvency problems may prevent settlement of the claims of its direct creditors, which may in turn jeopardize settlement of other institutions. The paper presents an empirical assessment of the potential size of this 'domino...

Following the ongoing debate on risks in interbank payment networks, gross settlement systems are being adopted in several industrialized countries. These systems, which effect real-time transfers of monetary base among bank accounts, add management of intraday liquidity to the duties...